The Situation: Viable substance with a no-longer-tenable cost base
The portfolio company had operated for nearly one hundred years as one of its region's leading distributors of electrical components, lighting solutions, HVAC systems and building automation — with framework agreements across several global tier-one manufacturers.
Five consecutive years of contraction in construction and real estate had reduced revenues by two thirds. The company carried high liabilities, 14 oversized locations, near-zero liquidity and was tracking to a projected net loss of €1.9 million. Without intervention, insolvency proceedings were unavoidable within weeks.
The situation matched exactly the distress profile Tactical Management addresses: substance with sustainable market relevance, operational adjustment requirement, a window not yet closed by liquidity erosion — and ownership and governance structures no longer capable of carrying the necessary change themselves.
Six workstreams in one quarter
Parallel work across assets, workforce, suppliers, working capital, debt and sales strategy — a complete restructuring within a single quarter.
Assets: 40 percent inventory reduction in one quarter. Sale of owned vehicles, return of rented fleet, divestment of non-strategic real estate, closure of five branches.
Workforce: Headcount reduced from 152 to 80 employees. 37 employees placed directly into new positions at third-party companies by our team — active outplacement responsibility, not passive separation.
Suppliers: 135 individual refinancing agreements signed. Supplier base rationalised; key partners elevated to preferred-distributor status.
Liquidity: Inventory liquidation campaign. €2.88M in personal partner guarantees released. Deferred payments negotiated with public administrations.
Operations: Daily treasury reporting implemented. The business was repositioned from a volume distributor to a specialised industrial and thermal-technology operator.
Sales: Objective-based sales policy, CRM rollout, tightened collection timelines, margin-focused discount restructuring.
Signature transaction: €4.5M tier-one liability eliminated without insolvency proceedings
The most complex element was a €4.5 million exposure to a global tier-one manufacturer. We designed a four-step structured transaction that extinguished the debt entirely through a sector transfer — and avoided forced liquidation for all parties.
Step 1: The manufacturer transitions to direct invoicing of key accounts. Our company's role is restructured to commission-based agent — preserving the relationship while reducing balance-sheet exposure.
Step 2: The manufacturer sells its receivable against our company at an agreed price to a sector competitor — the liability leaves the manufacturer's books.
Step 3: Our company cedes its agency contract to that sector competitor — providing the commercial value underpinning the transaction.
Step 4: The €4.5M liability is extinguished. No insolvency proceedings. Clean exit for all three parties.